Collaborative strategies are moving forward in industries such as construction, but are still emergent in others, such as retail and automotive. So, what lessons can be learnt from the frontrunners?
Procurement is the business function most likely to engage in collaborative working practices, with 60% deploying co-buying strategies, according to research carried out by the Institute for Collaborative Working (ICW), a non-profit organisation, which surveyed executives from 24 different sectors across all seven continents. But what drives procurement professionals to make the move towards collaborative working, and what are the benefits that can be reaped?
Partnering and collaborative working approaches have been around for decades, but it’s particularly significant now, as organisations become more interdependent and supply chains more diverse, explains David Hawkins, chief operating officer and knowledge architect at ICW. “It’s not only about spend, it’s about risk management and business continuity.”
As the main architect of ISO 44001, the international standard for ‘Collaborative Business Relationship Management’, Hawkins believes standards and frameworks are providing opportunities for companies to “build more robust collaborative platforms”.
Indeed, this standard has recently been awarded to the A14 Integrated Delivery Team (IDT), the first standalone project to receive it. The £1.5bn upgrade of the A14 between Cambridge and Huntingdon, which began in late 2016 and is due to open for traffic by the end of 2020, will see the major road upgraded and has been hailed by industry observers as an exemplary case for collaborative working.
The project, with 2,700 staff working across 21 miles every day, is being delivered by a joint venture of Balfour Beatty, Costain and Skanska, led by their client Highways England (HE). The companies, collectively known as A14 IDT, are fully integrated and working collaboratively to deliver a ‘world-class road scheme’. This is HE’s biggest scheme currently under construction.
“The A14 is a flagship project creating a fantastic opportunity to leave a legacy for this community. We are working with our delivery partners and their supply chain to make a lasting difference for this area,” says David Bray, HE project director. Indeed, the team has won awards from CIPS and ICW for both procurement and supply chain collaboration.
The A14 IDT was recognised at the 2018 CIPS SM Awards for “the collaborative nature of its supply chain management approaches and the tangible outcomes this has created for the project, its supply chain and the wider industry,” winning in its category: Most Improved Procurement Operation – Start Up.
At the start of the project, A14 IDT set out to make the project “a beacon of best practice” and developed mechanisms designed to encourage collaboration not only between the joint venture firms, but also the supply chain itself. The A14 Integrated Labour Team (ILT) is made up of supply chain partners VGC Group, Reliable Contractors, Danny Sullivan Group and Hercules Site Services, which all collaborate to provide labour resources to the project, and have recently been recognised for innovation at the Supply Chain Awards.
“They are not only demonstrating a desire for continuous improvement, but are changing their behaviours and utilising collaborative ways of working,” said the judges. “This is game-changing for our industry.”
Hawkins says it is “a spectacular collaboration”, adding that the IDT achieved significant time and cost savings by using a single source of equipment hire and introducing a joint labour rate for personnel, ensuring the effective use of staff. The project also deployed ‘blind tendering’ where proposals from existing and new suppliers were judged anonymously and selections made based on facts rather than pre-existing relationships.
“This developed new players into the game,” says Hawkins. “It may have ruffled a few feathers, but it worked really well. This was procurement in its purest form; focusing on behaviours so the prime suppliers became part of the thinking and planning processes.”
A year before the project began, the A14 IDT began to implement training as part of its supplier development programme. This was used as a vehicle to upskill and improve the supply chain partners’ knowledge on key sustainability issues important to the project and its stakeholders.
This groundwork has paid off, as the A14 project is the first major infrastructure project to be recognised as an ‘Ultra Site’ by the Considerate Constructors Scheme, set up in 1997 ‘to encourage the construction industry to work more closely together and realise the commercial, social and environmental benefits of greater integration’.
Being part of an Ultra Site has proved to be a positive driving force on this project, explains Mark Berg, A14 senior project director, as it has provided a cohesive framework for contractors and the entire supply chain to work to the same high standards. “Working with Ultra Site, in particular working with our supply chain, allows us to push the boundaries, the capability and capacity of our supply chain. They are engaged in the process going forward and try to really drive the values of what Ultra Sites stand for. This is important to us and we hope to use Ultra Sites as a means of changing the industry, not just for the A14, but for further communities.”
Indeed, according to Hawkins, the growing trends in globalisation and convergence in many industrial sectors has advanced the concept of trading relationships, both vertically and horizontally.
“It is becoming more frequent to see competitors working closely together in specific ventures, as well as the complexities of mergers bringing previous competitors into a single organisation,” he says. “In each case, the pressure to improve competitive edge and develop alternative value-based solutions has introduced a greater need to ensure that organisations can work in an integrated way to maximise potential benefits.”
What makes an effective collaborator?
Collaboration cannot take place without the cooperation of individuals, according to the ICW report Understanding the Psychology of Collaboration by Drs Mehmet Chakkol, Mark Johnson and Max Finne of Warwick Business School. Look for these key attributes:
- Strategically minded – seeing the wider picture.
- Team orientation – working jointly towards a common aim.
- Good communicator – able to understand other perspectives.
- Open to sharing – open to changing their minds and decisions.
- Creative/innovative – being innovative and intelligent with problem-solving, going beyond the job description, finding intelligent solutions.
- Empathetic – understanding the other parties’ perspectives and delivering value in a customised manner.
- Belief in collaboration – believe that collaboration will deliver superior output; this becomes a positive self-proclaimed prophecy.
- Good listener – hearing what others have to say.
- Behaving ethically – consistent with high moral and ethical standards.
- Leadership – inspirational people management, getting the best out of people for the project, while influencing others in a positive manner.